Global Fiscal Policy Responds to 53% Oil Surge

Morgan Stanley briefing notes fiscal safety nets thinner due to higher debt‑to‑GDP and borrowing costs, limiting new interventions.
In 2023, direct and indirect energy subsidies amounted to 1.5‑2.0% of global GDP, mainly from aggressive price suppression in the Euro area.
Asia absorbed 30‑50% of a 53% oil price rise, limiting domestic fuel price increase to 16%, while Europe maintains fiscal restraint.
Emerging market importers face twin‑deficit pressures on current accounts and fiscal balances, with short‑term support possible but long‑term fiscal capacity constrained.